What is the National Living Wage? Increase explained – how it compares to National Minimum Wage

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Around 2.7 million people are set to get a major pay rise, after the Government announced it will increase the National Living Wage in April 2024. It could work out as being worth an extra £1,800 a year if you work full-time.

The 9.8% (£1.02 an hour) boost to the legal minimum means workers will earn at least £11.44 an hour. The Treasury has also announced the age threshold for the National Living Wage will be lowered to include 21-year-olds.

At present, people aged 22 and under have a different minimum pay limit – the National Minimum Wage. This too is set to rise, with 18 to 20-year-olds in line for a near-15% (£1.11 an hour) rise to £8.60.

If you have a low income, there are numerous ways you can reduce your bills. Not only are there several energy bills support options, but you can also access social broadband tariffs and discounts on water bills and council tax.

It all comes ahead of the Autumn Statement, which will be delivered by Chancellor Jeremy Hunt at lunchtime tomorrow (Wednesday 22 November). Follow us on Facebook and Twitter to see the latest news and key updates.

What is the National Living Wage?

The National Living Wage is the lowest wage almost all UK workers can legally have (the most notable exceptions being self-employed people and members of the armed forces). Currently, you have to be 23 or older to get it.

People under this age get the National Minimum Wage, although the actual amount depends on how old you are. There is also a specific apprentice rate (you can see each legal minimum below). All of these rates get increased every spring to make up for inflation, which erodes the value of the pounds in our pockets.

The National Living Wage should not be confused with what is known as the ‘real living wage’. This is a scheme run by charity the Living Wage Foundation that calculates what the minimum wage should be if workers are to earn enough money to adequately cover their daily living costs.

Employers voluntarily sign up to it and have to pay their workers a minimum hourly rate of £12 (£13.15 if they live in London due to the higher living costs seen in the capital). Given the National Living Wage is a legal minimum, all employers have to meet it.

How much is the National Living Wage going up by?

The National Living Wage is rising 9.8% to £11.44 an hour in April 2024. It means a full-time worker will expect to earn almost £21,000 a year – more than £1,800 above the current rate. 

For those aged 21 and 22 who will now get the same amount, the rise will work out as an extra 12.4% (£1.26 an hour) compared to what they’re currently getting on the National Minimum Wage. This works out at almost £2,300 a year on top of their current salary, assuming they work full-time.

Even bigger rises are set to kick in for those aged 20 and under and apprentices. We’ve mapped out what the different rates will look like from April 2024:

Minimum wage type Current hourly rate (April 2023 to March 2024) New hourly rate (April 2024 to March 2025)
National Living Wage £10.42 £11.44
National Minimum Wage (21- and 22-year-olds) £10.18 £11.44
National Minimum Wage (18- to 20-year-olds) £7.49 £8.60
National Minimum Wage (under-18s) £5.28 £6.40
Apprentice National Minimum Wage* £5.28 £6.40

*Apprentices are classed either as being aged 19 or under; or over-19 and in first year of their apprenticeship